With the new year came a new minimum wage which looks good on paper. Liberal advocates have been fighting for increases and many states and cities have agreed. 18 states and 20 cities across the country implemented increases and the effects have been immediate.
Red Robin Gourmet Burgers (RRGB) has announced that they are eliminating bussers at 570 restaurant locations. These minimum wage positions have now become too expensive for the company to afford and this was the decision they were forced to make.
RRGB’s chief financial officer said the change is being made to “address the labor increases we’ve seen.” The cuts will save the company an estimated $8 million over the next year. Unfortunately, Red Robin is one of many being affected by these policies.
Many chains such as Chili’s and Applebee’s are replacing servers with tablets for ordering. Others are contemplating replacing cooks with machines that will do all the work.
Jack in the Box CEO: Swapping cashiers for robots ‘makes sense’ due to minimum wage increase https://t.co/WCZyP2ZJaR
— Thomas Paine (@Thomas1774Paine) January 11, 2018
851Franchise.com editor-in-chief Nick Powills spoke with Fox Business about how an increase doesn’t translate well in real life;
“From a business standpoint, [Red Robin made a] very smart move. From an employee standpoint, you just cut out $8 million worth of labor. The interesting thing about the minimum wage hike is that those that made the decisions to do it, did it on behalf of the employee … when intentions are good, and you can’t appease everybody, someone is going to eventually be on the short [end of the] stick.”
There probably aren’t many people who wouldn’t like to see all American workers making more. The money to pay them has to come from somewhere, surely even liberals can comprehend that. In cities where the minimum wage has been raised, businesses are forced into impossible situations. Small businesses must choose between things like laying off employees and raising prices.
Michael Mabry is the president and chief operating officer of restaurant franchise MOOYAH Burgers, Fries & Shakes. His company hasn’t eliminated positions yet but are struggling with the rising costs as well;
“What we are looking at, of course, is how do we build efficiencies within the restaurant to keep the same guest service … with the same people, but still allow franchisees to make money? Some of that comes through renegotiation of leases [and contracts] … unfortunately, some of it comes through [increasing] menu prices.”
Minimum wage jobs were always meant to be entry-level positions. Teenagers in school, college students, part-time positions for those with other jobs, these are the people that those jobs were designed for. It is true, they often aren’t enough to live independently on because they aren’t meant to be long-term career options.
While times have changed and with it, the people who are filling these positions, the amount of money that businesses can spend on employees hasn’t. At some point, the left has to question which is more important. Should entry-level positions pay $15 an hour or should hundreds of thousands be out of jobs when that becomes unaffordable?
Source: Fox Business